Melvin Branch, 30, was scheduled to be in court Thursday, facing DUI and gross vehicular manslaughter charges, but prosecutors sent the case back to the CHP for further investigation.
The DA's office says the case against Branch has been rejected for insufficient evidence at this time, and he was later released from jail.
Authorities say Branch was involved in a four-vehicle pileup just before 1 a.m. Tuesday on the westbound side of the 22 in the Garden Grove area. A 9-year-old girl was pronounced dead at the scene and her mother died at a nearby hospital.
Friends and family have identified the victims through a GoFundMe page as Jolene Gardner and her daughter, Payton Castillo. The page says they were driving home from a New Year's Eve party.
Branch was arrested on suspicion of DUI after the crash, CHP officers said in a report at the time.